wurde ase xrsvant arfereecor EAT Phone: 91-11-26074100125074200
(ase oftaes oft ast sara)
National Highways Authority of India
(Ministry of Road Transport and Highways)
‘wh-5 Ua 6, Faez-10, sree, TE Peet - 110075
G-5.& 6, Sector-10, Dwarka, New Delhi-110075
NHAI/Policy Guidelines/Standard DCA Document HAM/2020
Policy Circular No. 3.1.27 dated 19*" November, 2020
(Decision taken on e-office file Comp. No. 46547)
Instruction of Ministry of Finance, Department of Expenditure regarding
(i) Performance Security, (ii) Additional Security Deposit/Bank
Guarantee(BG) in case of Abnormally Low Bids (ALBs) and (iii) Bid
Security/ Earnest Money Deposit
MORTH vide OM no. F.No. G-20016/01/2020-TF-II dated 17.11.2020 has
forwarded 3 Nos. of Ministry of Finance, Department of Expenditure O.Ms. No.
F.9/4/2020-PPD dated 12.11.2020 on subject mentioned above for immediate
implementation by all concerned. A copy of the same is attached herewith for
implementation with immediate effect.
3s
This issues with the approval of Competent Authority.
Encl. As stated above.
To,
(Digvijay Mishra)
CGM (Coord)
All Officers of NHAI HQ/ ROs/ PIUs/ CMUs/ Site Offices
Copy to:
Preyer
All Members/CVO
PS to Chairman
Hindi Officer for translation in Hindi
Library for hosting the circular on library site
Web admin for circulation102655/2020/GM (CMD) Office
No. F.No.G-20016/01/2020-TF-II
Government of India
Ministry of Road Transport and Highways
Transport Bhawan
New Delhi the 17" November, 2020
OFFICE MEMORANDUM
Subject: _Latest instructions of Ministry of Finance, Department of Expenditure regarding
(i) Performance Security, (ji) Additional Performance Security in case of
Abnormally Low Bids (ALBs)and (ji) Bid Security/Earnest Money Deposit -
regarding.
The undersigned is directed to forward herewith 3 nos. of Ministry of Finance, Department
of Expenditure O.Ms. No.F.9/4/2020-PPD dated 12.11.2020 on the subjects mentioned above as
per details given below:~
)
ii)
iti)
3.
Security released for subsisting contracts may be sent on weekly basis to the undersigned
Department of Expenditure vide OM No. F.9/4/2020-PPD dated 12.11.2020 has decided to
reduce Performance Security from existing 5-10% to 3% of the value of the contract for all
existing contracts. However, the benefit of the reduced Performance Security will not be
given in the contracts under dispute wherein arbitration/court proceedings have already
been started or are completed. All tenders/contracts issued/concluded till 31.12.2021
should also have the provision of reduced Performance Security.
In all contracts, where Performance Security has been reduced to 3% in view of the above
stipulations, the reduced percentage of Performance Security shall continue for the entire
duration of the contract and there should be no subsequent increase of Performance
Security even beyond 31.12.2021
DOE vide OM No. F.9/4/2020-PPD dated 12.11.2020 has also decided that no provisions
should be kept in the Bid Documents regarding Additional Security Deposit/Bank Guarantee
(8G) in case of Abnormally Low Bids. It has been further mentioned that wherever, there
are compelling circumstances to ask for Additional Security Deposit/Bank Guarantee (8G)
in case of ALBs, the same should be taken only with the approval of the next higher
authority to the authority competent to finalise the particular tender, or the Secretary of
the Ministry Department, whichever is lower.
Department of Expenditure vide OM No. F.9/4/2020-PPD dated 12.11.2020 further decided
that notwithstanding anything contained in Rule 171 of GFRs 2017 or any other Rule or any
provision contained in the Procurement Manuals, no Provisions regarding Bid Security
should be Kept in the Bid Documents in future and only provision for Bid Security
Declaration should be kept in the Bid Documents. It has also been specified by DOE that
these instructions will be applicable for all the tenders issued till 31.12.2021,
These instructions are being circulated herewith for information and strict comptiance.
Action taken report on each of the items atong with details of amount of Performance
Bw.”
(Anup Kumar Dey)
Under Secretary to the Government of India
Encl: As above. —
a
Contd...102655/2020/GM (CMD) QfKENo. F.No.G-20016/01/2020-TF-II dt. 16.11.2010)
DG (RO) & $5
Chairman, NHAL
MD, NHIDCL
AIUADGS/ALL CES
CE (Monitoring): With a request to send consolidated figures of Performance Security
released in case of PWDs on weekly basis against amount of work awarded
Copy to: PPS to Secretary
PPS to ASEFA
PS to DFA
Copy also to: Director, NIC - with a request to upload the OM on Ministry's Website along
with enclosure of OMs of Ministry of Finance, Department of Expenditure.
Pike CO
P= ROR102655/2020/GM (CMD) Office
No. F.9/4/2020-PPD
Government of india
Ministry of Finance
Department of Expenditure
Procurement Policy Division
512, Lok Nayak Bhawan, New Delhi
Dated the 12" November 2020
OFFICE MEMORANDUM
Subje:
Performance Security.
As per Rule 171 of General Financial Rules (GFRs) 2017, Performance
Security is to be obtained from the successful bidder awarded the contract for an
amount of five to ten percent of the value of the contract to ensure due performance
of the contract. Similar provisions also exist in the Manual for Procurement of Works
2019 and Manual for Procurement of Consultancy & other Services 2017 issued by
this Department.
2. The Government is in receipt of many representations that on account of
slowdown in economy due to the pandemic, there is acute financial crunch among
Many commercial entities and contractors, which in turn is affecting timely execution
of the contracts. It has also been represented that this may affect the ability of
Contractors to bid in tenders and hence reduce competition. Requests are being
received for reduction in quantum of Security Deposits in the Government contracts.
3. _ In view of all above, it is decided to reduce Performance Security from
existing 5-10% to 3% of the value of the contract for all existing contracts.
However, the benefit of the reduced Performance Security will not be given in the
contracts under dispute wherein arbitration’ court proceedings have been already
started or are contemplated
4. Further, all tenders/ contracts issued/ concluded till 31.12 2021 should also
have the provision of reduced Performance Security.
5. __ Inall contracts where Performance Security has been reduced to 3% in view
of above stipulations, the reduced percentage of Performance Security shall
continue for the entire duration of the contract and there should be no subsequent
increase of Performance Security even beyond 31.12.2021
Similarly, in all contracts entered into with the reduced percentage of
Performance Security of 3%, there will be no subsequent increase in Performance
Security even beyond 31.12.2021.
6. Wherever, there is compelling circumstances to ask for Performance Security
in excess of three percent as stipulated above, the same should be done only with
the approval of the next higher authority to the authority competent to finalise the
oO402655/2020/GM (CMD) Office
particular tender, or the Secretary of the Ministry/ Department, whichever is lower.
Specific reasons justifying the exception shall be recorded
7. These instructions will be applicable for all kinds of procurements viz. Goods,
Consultancy, Works, non-consulting Services etc and are issued under Rule 6/1) of the
GFRS 2017
kei
(Kotlurd Narayana Reddy)
Deputy Secretary to the Govt. of India
Tel: 24621305
Email: kn.reddy@gov.in
To,
All the Secretaries and Financial Advisers to Government of India
Copy to: Secretary, Department of Public Enterprises with a request to issue the
same instructions to Central Public Sector Undertakings (CPSUs).102655/2020/GM (CMD) Office
No. F.9/4/2020-PPD
Government of India
Ministry of Finance
Department of Expenditure
Procurement Policy Division
512, Lok Nayak Bhawan, New Delhi
Dated the 12" November 2020
OFFICE MEMORANDUM
Subject: Additional Performance Security in case of Abnormally Low Bids
(ALBs),
The Government is in receipt of many representations that on account of
slowdown in economy due to the pandemic, there is acute financial crunch among
many commercial entities and contractors, which in turn is affecting timely execution
of the contracts. It has also been represented that this may affect the abiity of
contractors to bid in tenders and hence reduce competition, Requests are being
received for reduction in quantum of Security Deposits in the Government contracts,
2. _In this context, it is noted that Additional Performance Security in case of
Abnormally Low Bids (ALBs) is being taken from the contractors by various
Ministries/ Departments though there is no provision for the same in General
Financial Rules (GFRs) 2017 or the Manuals for Procurement issued by this
Department.
3.___As per para 7.5.7 of the Manual for Procurement of Goods 2017 issued by
this Department, an Abnormally Low Bid is one in which the bid price, in combination
with other elements of the Bid, appears so low that it raises matenal concems as to
the capability of the bidder to perform the contract al the offered price. Procuring
Entity may in such cases seek written clarifications from the bidder, including
detailed price analyses of its bid price in relation to scope, schedule, allocation of
risks and responsibilities, and any other requirements of the bids document. If, after
evaluating the price analyses, Procuring Entity determines that the bidder has
Substantially failed to demonstrate its capability to deliver the contract at the offered
price, the Procuring Entity may reject the bid/ proposal. However, it would not be
advisable to fix @ normative percentage below the estimated cost, which would be
automatically be considered as an abnormally low bid. Due care should be taken
while formulating the specifications at the time of preparation of bid document so as
to have a safeguard against the submission of abnormally low bid from the bidder.
4, In view of above, it is reiterated that no provisions should be kept in the
Bid Documents regarding Additional Security Deposit) Bank Guarantee (BG) in
case of Abnormally Low Bids.
5. Wherever, there are compelling circumstances to ask for Additional Security
Deposit/ Bank Guarantee (BG) in case of ALBs, the same should be taken only with
D>102655/2020/GM (CMD) Office
the approval of the next higher authority to the authority competent to finalise the
Particular tender, or the Secretary of the Ministry/ Department, whichever is lower,
8. _ These instructions will be applicable for all kinds of procurements viz. Goods,
Consultancy, Works, non-consulting Services ete.
hahha,
(Kotluru Narayana Réddy)
Deputy Secretary to the Govt. of India
Tel: 24821305
Email: kn.reddy@gov.in
To,
All the Secretaries and Financial Advisers to Government of India
Copy to: Secretary, Department of Public Enterprises with a request to issue the
same instructions to Central Public Sector Undertakings (CPSUs),102655/2020/GM (CMD) Office
No. F.9/4/2020-PPD
Government of India
Ministry of Finance
Department of Expenditure
Procurement Policy Division
512, Lok Nayak Bhawan, New Delhi
Dated the 12" November 2020
OFFICE MEMORANDUM
The Government is in receipt of many representations that on account of
Slowdown in economy due to the pandemic, there is acute financial crunch among
Many commercial entities and contractors, which in turn is affecting timely execution
of the contracts. It has also been represented thal this may affect the ability of
contractors to bid in tenders and hence reduce competition, Requests are being
received for reduction in quantum of Security Deposits in the Government contracts.
2. _As per Rule 170 of General Financial Rules (GFRs) 2017, Micro and Small
Enterprises (MSEs) and the firms registered with concemed Ministries/ Departments
are exempted from submission of Bid Security. Further, in lieu of Bid Security,
Ministries! Departments may ask bidders to sign "Bid Security Declaration” accepting
that if they withdraw or modify their bids during period of validity etc., they will be
suspended for the time specified in the tender documents. Similar provisions also
exist in the Manuals for Procurement of Works 2019 and Manual for Procurement of
Consultancy & other Services 2017,
3. In this context it is noted that Bid Security (also known as Earnest Money
Deposit) is still being taken from the contractors by the various Ministries!
Departments, though the relaxations have already been provided in General
Financial Rules (GFRs) 2017.
4. In view of above, it is reiterated that notwithstanding anything contained in
Rule 171 of GFRs 2017 or any other Rule or any provision contained in the
Procurement Manuals, no provisions regarding Bid Security should be kept in
the Bid Documents in future and only provision for Bid Security Declaration
should be kept in the Bid Documents.
5. Wherever, there are compelling circumstances to ask for Bid Security, the
same should be' done only with the approval of the next higher authority to the
authority competent to finalise the particular tender or the Secretary of the Ministry/
Department, whichever is lower.
6. _ The above instructions will be applicable for all the tenders issued till
31.12.2021
wD402655/2020/GM (CMD) Office
7. _ These instructions will be applicable for all kinds of procurements viz. Goods,
Consultancy, Works, non-consulting Services etc and are issued under Rule 6(1) of
the GFRs 2017,
Kewe RDA
(Kotluru Narayana Réddy)
Deputy Secretary to the Govt. of India
Tel: 24621305
Email: kn.reddy@gov.in
To,
All the Secretaries and Financial Advisers to Government of India
Copy to: Secretary, Department of Public Enterprises with a request to issue the
same instructions to Central Public Sector Undertakings (CPSUs)
“4